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SMEs accused of misusing funds issued for business expansion

By Ch.KHALIUN

On Monday, the Ministry of Industry presented a report on enforcement and credit monitoring of funds issued to support small and medium enterprises (SMEs), announcing that 23.3 billion MNT made available for 61 projects has been misused.
The report was conducted from March to May 2015, and covered 1,479 SME projects. While 95.9 percent of the projects were being implemented without any problems, the implementation of 61 projects was found to be inadequate. The Ministry cancelled their agreements with 22 project owners, transferring concessional loan interest rates to commercial loan interest rates.
Officials highlighted that 20 projects didn’t start expansion projects with the issued funds, and they were unable to reach contacts for 19 projects during the monitoring period.
In the last three years, concessional loans have been issued to support SMEs, while loans from government bonds and the Chinggis Bond were issued to leather, cashmere, sewing, textile, and student uniform production factories.
Over the last three years, approximately 518.6 billion MNT has been issued for 14,897 projects, with 83.5 percent of the loans issued for operation expansion.
T.Enkhbayar, Head of the Strategic Policy and Planning Department of the Ministry of Industry, emphasized that the loan repayment of companies producing student uniforms has been poor. Currently, entities that took out concessional loans for uniform production have outstanding balances of around 16 billion MNT.
The Ministry reported that new concessional loans will be issued only to companies that have guaranteed supply, production and sales.

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Posted by on May 26 2015. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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